Reliance Spinning IPO introduces 10% discount for general public, revised share price at Rs 820.80

KATHMANDU: In a significant move on the Nepal Stock Exchange (NEPSE), traders and investors eyeing the Reliance Spinning IPO are required to commit a minimum investment of Rs 41,040. The IPO, employing the book-building approach, has set its offering price at Rs 820.80 per share for the general public, marking a crucial development in the country’s financial landscape.

According to NEPSE, institutional investors have played a pivotal role in establishing the cut-off price for the Reliance Spinning IPO at Rs 912.

This was achieved through their full subscription to all shares at this determined rate. This strategic move by institutional investors underlines their confidence in the company’s prospects and adds a layer of credibility to the IPO.

In an effort to make the IPO more accessible to the general public, there is a provision to extend shares at a discounted cut-off price. In this case, the discounted rate is set at 10% lower, aligning with the book-building mechanism. As a result, the revised share price for the public stands at Rs 820.80 per share.

This discounted offering aims to encourage wider participation and democratize investment opportunities in the stock market.

Individual investors are required to submit applications for a minimum of 50 shares, totaling a cost of Rs 41,040. This entry requirement is structured to accommodate a diverse range of investors, fostering inclusivity and participation from various segments of the market.

Reliance Spinning, the company at the center of this IPO, intends to offer 10.14% of its total issued capital, amounting to Rs 1.9 billion.

This offering translates to 1,926,266 shares. Following the allocation of shares to institutional investors, the remaining 1,155,960 shares will be made available for issuance to locals affected, individuals employed abroad, and the general public.

This distribution strategy is designed to cater to a broad spectrum of investors and engage various stakeholders in the IPO.

As of the end of July, the company’s net worth per share was reported at Rs 248.67, highlighting the company’s financial strength. The prospectus further reveals an income per share of Rs 54.34 and an accumulated profit of Rs 5.63 billion, providing investors with insights into the company’s financial performance and stability.

The anticipated standard investment payback period for investors is estimated at 6.88 years, providing a clear timeline for potential returns.

This information is crucial for investors seeking a balanced understanding of the risk and reward associated with their investment in Reliance Spinning.